Petron Corp in $100m block trade

The benefit scheme of Philippine oil company further reduced its stake in the company after pricing shares at the bottom of its indicative price range.

The Petron Corp Employees' Retirement Plan raised $100 million on Monday via an accelerated block sale of shares in the Philippine oil company.

Books opened in Hong Kong Monday night at an indicative price range of Php11.50 to Php12.00 per unit, which represented a 5.5% to 9.4% discount to Petron's closing share price on Friday, according to a term sheet.

PCERP sold 380 million shares in Petron priced at Php11.50 each thanks to decent demand from a range of long-only institutional investors and hedge funds, enabling the deal to close just a few hours after books opened, a source familiar with the matter said.

Roughly 50% of the more than 35 investors who participated in the sale were international, according to the source, who said the deal was multiple times oversubscribed in spite of Petron's poor recent share price performance. Shares in Petron have lost about 10% so far this year and are trading at 31.83 times the company's estimated 2014 earnings, according to Bloomberg. 

The source added that the block sale was initiated after a reverse inquiry from investors who participated in an earlier sale of Petron shares. Petron Corp, the largest oil refining and marketing company in the Philippines, held an accelerated block sale in March which netted PCERP $175 million.

"This was a case of proactively going to the vendor, saying there's decent demand and interest in the market, and [asking] do you want to sell more?" the source told FinanceAsia.

PCERP owned 9.8% in Petron following the March block sale. It now owns 5.7% of the company, or 540 million shares in total.

Petron supplies more than a third of the Philippine's oil requirements, operating a refinery in Limay, Bataan, with a capacity of 180,000 barrels per day.

Petron majority shareholders previously included the Philippine National Oil Co and Aramco Overseas Co, each with a 40% stake.

UBS was sole bookrunner on the deal, which has a traditional 90-day lockup period.

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